19/01/2012 - The 7th meeting of the Forum on Tax Administration, which brought together the heads of tax administrations from 43 countries, concluded with a unified and strengthened commitment to combat offshore tax abuse. Our strategy includes unprecedented sharing and exchange of information and coordinated action to better identify and tirelessly pursue the promoters and users of abusive offshore schemes. Those who once felt safe concealing their money and assets overseas are now in an increasingly risky position. We also focused on the need to work smarter in times of shrinking budgets, and how to strengthen our relationship with large corporations through efficient and effective strategies that benefit both the taxpayer and taxing authority. Our discussion was enriched by the presence of business leaders and we are very grateful for the contribution they made to our meeting.

Offshore ComplianceAlthough there have been some high-profile successes in the fight against offshore tax abuse, resulting in significant additional tax revenues and real improvements in transparency and exchange of information, it is far too soon to declare victory. When promoters and facilitators feel that we are tightening the net, they may simply move to a new location. We will be relentless in our pursuit of them – no matter where they may be. Our Offshore Compliance Network is building on the achievements of individual countries to improve our collective ability to deter, detect, and deal with offshore tax evasion. An early priority is to better understand the structures used to hide offshore wealth. We further agreed that collaboration must now include coordinated actions by countries to finally put an end to offshore non-compliance.

Taking the Relationship between Tax Administrations and Large Business Taxpayers FurtherThe FTA has worked hard in recent years to foster a more constructive relationship between large businesses and tax administrations. An adversarial relationship between tax administrations and multinational corporate taxpayers serves neither of our purposes well and is contrary to our common goals, which are earlier and greater certainty, consistency, and efficiency. To this end, we agreed that we need to create innovative strategies for issue resolution that are less time and resource intensive for both, while still promoting a climate that encourages compliance with tax laws. We will pay particular attention to the process of conducting and resolving transfer pricing cases. Overall, we intend to move away from a hide and seek approach to one based on greater transparency on the part of both taxpayers and tax administrations. As more companies put good tax compliance at the heart of their corporate governance, this will be easier to achieve.

Tax Administration in the Current ClimateThe continued fragility that permeates the global economy demands that we work smarter. In this context, it is important for tax administrations to be efficient and effective in carrying out the roles entrusted to them. We are committed to sharing best practices among ourselves and with developing countries to continually improve the quality of tax administration across the world. We also recognize that high quality customer service is essential to nurture high levels of voluntary compliance.

Conclusion

There is a common thread that runs through these areas of focus, particularly cooperation and coordination. The global challenge of offshore tax abuse demands coordinated action between countries that keeps the pressure up and makes it more difficult and risky for those taxpayers unlawfully and secretly hiding money offshore. We owe that to the majority who play by the rules and pay their fair share of taxes.

We thank the Federal Public Revenue Administration of Argentina for hosting this meeting.

Finally, we also express our gratitude to the Russian Federal Tax Service for agreeing to host the 8th meeting of the Forum on Tax Administration in 2013.

For more information about the topics discussed at our meeting and to view the FTA’s latest reports please visit www.oecd.org/tax/fta.

For more information about the Forum, please contact Jeffrey Owens (Jeffrey.Owens@oecd.org), director of OECD’s Centre for Tax Policy.